The selloff in fixed income (AGG, BND) has created great opportunity in a number of sectors,...

The selloff in fixed income (AGG, BND) has created great opportunity in a number of sectors, writes David Kotok, particularly municipals (MUB-0.7%), where the entire curve (of highest quality paper) is trading above comparable Treasury yields. Present pricing only makes sense if one believes the U.S. tax code is going to be repealed. The dysfunction may even have overseas investors attracted to the raw yield of munis, says Kotok, suggesting evidence sophisticated foreigners are stepping up to buy.